Here's why you're failing to learn how to trade:

[arbitrage16]

Trading perfectly exemplifies the adage ‘simple but not easy’. To enter at one price and then exit, that is all. Any trader you speak to will offer their own thesis on how and why it is so difficult to bridge the gap/chasm between simple and easy, and you will receive wildly different responses from every trader because as individuals we are unique. But a common mistake amongst people who are failing to bridge that gap is one I would like to highlight and discuss.

In mixed martial arts there is a trap fighters sometimes fall into, particularly when they are dominating a fight, where they fall in love with one of their tools at the cost of another. They become too enraptured by the impact of their striking and forget to wrestle and wear their opponent down, for example. Traders abound who become distracted by tangential efforts to improve - to gain Edge, as they would have it - and in doing so lose sight of the simplicity of the endeavour. You have the ex-trader from this forum who bought the six-screen setup before he was truly profitable, and was then forced to sell it on eBay. There is the trader on twitter who uses language gleaned from the nomenclature of financial markets to ‘explain' what he’s doing, such is the desire to make sports trading seem more complex and refined than it actually is. There is a user on this forum, who I won’t name, who has become so caught up in his own mental entanglements as he tries to crack automation that not only can he not see the wood for the trees, rather he is so zoomed in on the grain and the knots and trying to calculate from the rings and shape of the leaves, using his purpose-built excel-macro, how many trees are currently in a symbiotic intra-forestry communicative relationship that he can’t hear the cries of ’TIMBER!’.

And then you have Eightbo. As a user he is endlessly helpful and insightful, and indeed that insight has been useful to me on my journey, but it’s clear that he has become so caught up in all of the extraneous research and self-populating excel diagnostic sheets and sleeping on the floor that he has completely blocked himself off from what is necessary to trade successfully. What that is, I cannot say, because to refer to my previous point for each of us it is going to be different - this is a point Peter Webb has made endlessly - and yet it is obvious that Eightbo, like so many others, are struggling because they have become so enamoured with the accoutrements and tangential efforts to become a better trader that they are blocking themselves off from what is actually required.

People who engage deeply in market-modelling, learning chart patterns and terminology, back-testing every strategy and stuffing themselves with knowledge and angles and ‘edges’ are missing a critical point; that when operating in the market this amount of research and learning is counter-productive, because it creates a lens, an egoic one, that means you are inclined to believe that you ‘know’ what is going to happen next. "Of course you do, you’ve read all of those trading books!” But you don’t. You don’t, and I don’t. Sure, we can have an inclination - and as you progress as a trader intuition is certainly something that is honed - but by thinking you ‘know’ means that you miss out on one of the foundations of thought that is required to be a successful trader; accepting that anything can happen.

This mental flexibility, that comes from truly believing that anything can happen and being open to the possibilities this presents, means an ability to make a decision with conviction and financial backing, and then a millisecond later completely switch your thesis and decision and action around and make the complete opposite decision; this is a deep skill that can only be fostered by time in the markets and finding ways to free oneself up from the mental baggage that accrues naturally as a part of learning something as challenging as trading. What many people miss, and I include myself in this for a time, is the extent to which this ‘mental baggage’ is compounded by force-feeding oneself on all of the other ‘edges’ that people seem to think will make them the trader they want to be.

I don’t offer this post as a telling off, rather from the benefit of my own experience, for I too have been a ‘have-stuffer’ seeking out all of the bells and whistles and toys that are on offer. Indeed, I would suggest that given BA being as ‘fully featured’ as it is, and from his YT videos, we can infer that Euler is similarly enamoured with this, ahem, ‘increased functionality’. I’d imagine that once a trader has reached a level of unconscious competence, then it is about improving each aspect of the process and here the added functionality of a tool like BA, as well as all of the various other accoutrements that are on offer to traders can be very useful. However, in the learning stage these things are a major distraction, taking time and focus away from stripping one’s process down to what truly works, what is edge and what is distraction. Over the years my trading process document has been a chaotic rendering of lines and arrows and reminders, stuffed to the gills with acronyms and short hands for what I must do/not do when in the markets. As of its latest iteration, it contains 1 word and 1 acronym.

[jimibt]

interesting post - think we can all reflect on that (maybe some more than others ). It feels like a cathartic post, (a diary entry of sorts??) and is definitely something we should all strive to do from time to time as the past (and our writings) have a great way of validating the present (from our own personal perspective).

Over the years my trading process document has been a chaotic rendering of lines and arrows and reminders, stuffed to the gills with acronyms and short hands for what I must do/not do when in the markets. As of its latest iteration, it contains 1 word and 1 acronym.

hopefully those aren't SH!T and FFS

[ruthlessimon]

accepting that anything can happen.

I'm not buying your ebook if that's your overarching premise

My issue with that premise, is that could be used for dice throwing, blackjack, roulette etc. Yeah, anything can happen in the short term (https://www.youtube.com/watch?v=zGCdBsOIKYA) - but in the long term, the expectancy plays out (should play out).

Imho, someone with a true edge, knows what it is. Maybe they don't know why it occurs; but they know what variables are valuable & how to use em properly.

The reason trading is so difficult imho, these edges move. A skill learnt in 2018 might not be valid in 2019

[ShaunWhite]

accepting that anything can happen.

I'm not buying your ebook if that's your overarching premise.....
The reason trading is so difficult imho, these edges move.

I think moving edges fall comfortably under 'Anything can happen'

Plus you say "in the long term, the expectancy plays out (should play out)." Well that's only true if the future is a carbon copy of the past.
"Anything can happen" is about not becoming attached to preconceived ideas and I think it's a useful message, as is the whole posting actually for people at that tricky intermediate level.

[ruthlessimon]

I think moving edges fall comfortably under 'Anything can happen'

Plus you say "in the long term, the expectancy plays out (should play out)." Well that's only true if the future is a carbon copy of the past.
"Anything can happen" is about not becoming attached to preconceived ideas and I think it's a useful message, as is the whole posting actually for people at that tricky intermediate level.

It's a fair point

But "moving edges" to me implies 'new predicability', not 'anything can happen' (the tricky bit, having trust it's a valid find).

If an edge disappears, 'anything can happen' - to me it's the same as saying the market is random. & we can't make money in a random market

"If markets were random you could not make money trading, and, if you are not convinced of that, you are missing a key piece of the intuition." - Mike Bellafiore

That's my angle

https://www.smbtraining.com/blog/findin ... om-markets

[ShaunWhite]

My view is that they're not static (or this would be easy) and they're not random (or this would be impossible).
So therefore they must evolve (timeframes may vary). Whether that evolution is between new states of predicability or a constant change is too big a topic for this thread, and I don't want to lose focus from what was a really good posting by arbitrage16.

[Kai]

I did notice last week that Eightbo changed his location to "gone dark", hopefully he's doing well.

[arbitrage16]

I did notice last week that Eightbo changed his location to "gone dark", hopefully he's doing well.

I noticed this also Kai, hopefully he's stripping away some of the nonsense and distractions, including this forum, and focusing on what's essential.

[mcgoo]

I did notice last week that Eightbo changed his location to "gone dark", hopefully he's doing well.

I noticed this also Kai, hopefully he's stripping away some of the nonsense and distractions, including this forum, and focusing on what's essential.

Interesting thread. Sounds silly but I have only just started coding bots 'with an edge' or at least what I hope will be an edge. It is weird but you think you understand what an edge is but then realise you haven't been able to articulate it. I can clearly articulate two edges..both went profitable almost immediately..time will tell of course and how profitable remains to be seen but my head was clearer and my bots more elegant as soon as I stopped "blindly looking for that black cat in a dark room" My manual trading still sucks but I don't have an edge there and I am calmer as a result of that understanding. This process has taken me a LOT longer than most to learn but I am still here for now.Anyway, your points resonate with me and have helped some more.Nice one.

[ruthlessimon]

Whether that evolution is between new states of predicability or a constant change is too big a topic for this thread

too big yes

But deep down, I hope it's the former. Like financials go through bull & bear markets, punters go through backing & laying cycles. If that's true, that'd be insane

[arbitrage16]

Thanks for the generally positive responses, glad it could offer some insight for people.

accepting that anything can happen.

I'm not buying your ebook if that's your overarching premise

I find myself getting frustrated with your responses Simon, here and elsewhere; snide 'jokes' like this, straw-man arguments as you focus on one minor point and disregard the wider context, and generally de-railing threads as you further your own dogma.

I don't honestly believe you're looking to contribute to a discussion or impart knowledge, rather you're attempting to establish your 'rightness', and that makes actual discussion impossible. It's especially difficult when your responses are written in a style that foregoes clarity in favour of an obliqueness that you think testifies to your own wit and wisdom, but does the exact opposite.

You don't understand the difference between debate and dialectic and you really need to.

[ruthlessimon]

I find myself getting frustrated with your responses Simon

I vehemently dislike the notion 'anything can happen'/'constant change' - & I personally think it causes real harm to traders (especially new traders). Because, preoff, there seems to be specific points in the market which are clearly better than others, for doing certain types of swing (whether that be a breakout or a reversal). The tricky bit, these points move around, but weirdly, but on massive time scales (i.e. might shift after 1 yr). That is what my data suggests; almost as though punters shift between backing & laying; similar to a bull bear market shift. & trader's who aren't ready/prepared/slow for the change - get expelled from the market - or enter very very deep drawdowns. That's my hypothesis, & that's what I'm actively testing atm.

I'm not saying that's right, but that's my opinion - shaun takes the opposite view, which is probably equally right - the ideal being a synergy. But for me, shaun went about it the right way. He didn't attack me, he attacked my premise

[spreadbetting]

I don't believe for one minute that punters are switching between laying and backing in some kind of yearly cycle as ruthles simon suggests but it really doesn't matter as ultimately the markets tell us when we're wrong or right. I'd guess the reason the majority of traders are failing to learn is because they're spending far too much time worrying about what others are doing or saying. They'll always be plenty of angles to exploit the markets you just have to find your own niche and put your money where your mouth is, so to speak.

[ruthlessimon]

I don't believe for one minute that punters are switching between laying and backing in some kind of yearly cycle as ruthles simon suggests

I can only go back to May 2018, so I don't know if it's yearly. But for me, & my style of trading, there seems to have been a deep shift (july onwards). Some edges have been completely eroded - but new ones have emerged in their place. My fear is their longevity & the status quo reasserting/mushing

ultimately the markets tell us when we're wrong or right.

Yah completely agree

[SweetLyrics]

I find myself getting frustrated with your responses Simon

I vehemently dislike the notion 'anything can happen'/'constant change' -

Why?

Markets are unpredictable. That doesn't mean that they are unexploitable, but it's undeniable that anything can happen at any time.

Nobody knows where a busy, volatile market will be in 5 minutes' time, for example.

Nobody.

However, you don't need to know what will happen next. You can even be wrong most of the time but still make money, if your losses pay for your wins.